Heineken, the world's second-largest brewer by volume, cut its 2023 profit growth forecast after an economic slowdown in a core Asian market depressed first-half earnings by more than expected.
The Dutch company, whose brands include Tiger and Sol, said it now expected growth in operating profit before one-offs this year to be between zero and a mid single-digit percentage.
It had previously forecast a mid- to high- single-digit percentage.
Operating Profit Decline
In the first half, Heineken sold 5.6% less beer than a year ago, and despite a jump in revenue due to higher prices, suffered a 8.8% like-for-like decline in operating profit, compared with the average 4.8% decrease forecast in a company-compiled poll.
"We continue to focus on executing our EverGreen priorities and to invest for long-term sustainable value creation," commented Dolf van den Brink, chief executive.
"We prioritised and delivered the front-loaded pricing required to offset unprecedented input and energy cost inflation."
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Vietnam Slowdown
Heineken said its results in Asia had been affected by an economic slowdown, notably in Vietnam, one of the company's largest markets, which is facing reduced global demand for its exports.
Beer volumes in the region fell by 13.2% and sales of more expensive premium beers by even more. Operating profit reduced by about a third.
The brewer - whose namesake brand is Europe's top-selling beer - said it expected a strong overall turnaround of profit in the second half of the year.
"In Europe, the region with the highest inflationary impact, volume declined in line with our expectations, yet demand in APAC was considerably softer than foreseen, due to an economic slowdown and our own underperformance in Vietnam, " van den Brink added.
Additional reporting by ESM
